GlobalFoundries has signed off on the purchase of IBM's chip business making it one of chip industries key players and actually filling its bank acount.

It gets two new fabs and 16,000 patents added to its portfolio. In addition, IBM is paying GloFlo $1.5 billion and investing a further $3 billion over the next five years to get rid of a division which has been running at a considerable loss for ages..

The deal seems odd as it appears to favour GlobalFoundries and making making it well-funded and patent-rich with little value to Biggish Blue.

Sanjay Jha, chief executive officer of GlobalFoundries admitted the company had significantly enhanced its technology development capabilities and reinforce our long-term commitment to investing in R&D for technology leadership.

GlobalFoundries takes over IBM's manufacturing plants in East Fishkill, New York and Essex Junction, Vermont, which it says it will continue to run in order to boost its own production rates.

In exchange for the cash, patents and facilities, GlobalFoundries has agreed to continue to supply IBM with semiconductors for at least the next decade while IBM will provide GlobalFoundries with the results of its ongoing $3 billion investment in semiconductor research and development over the next five years.

Since AMD canned its Project Skybridge two weeks ago the dark satanic rumour mill has suggested that Globalfoundaries might have had a hand in it.

The logic was that after GloFlo has agreed to work with Samsung on 20nm, it gave up on its its own 20nm roadmap and left AMD without a platform for its processor.

There were other theories, including a lack of vendor interest and the fact that AMD had delayed its first Cortex-A57 ARM CPU and follow-up custom ARM architecture there was not much reason for it to continue

Now BitsandChips thinks that AMD was left without a vendor partner for its HSA-capable 20nm iteration of Jaguar.

Skybridge was supposed to be platform compatible with its ARM efforts and it was always seen as ambitious. HSA would come to AMD's lower-end parts, the ARM and x86 common platform would open the door to a standardized socket for all AMD hardware.

GlobalFoundries has indeed killed t its 20nm product division and fairly recently 20nm LPM was still listed as a future node that would be available for customer designs until April. GlobalFoundries original plan before tying up with Samsung was for a 20nm planar node followed by a transition to a hybrid 20/14nm process the company dubbed 14nm-XM.

AMD moved its socketed Kabini processors over to GlobalFoundries and clearly was thinking of building Skybridge at GloFlo. But once the deal with Samsung was signed, GlobalFoundries was under contractual obligation to devote most of its resources to bringing up 14nm capacity in order to serve as Samsung's second source.

Another thing which might have been a factor was that GloFlo asked AMD for cash to create the 20nm line. AMD has made it clear that was not going to happen and that also put a spanner in the works.

GlobalFoundries node cancellation could also explain why AMD paid no apparent penalty for failing to buy as many wafers as originally forecast. Normally, failing to purchase its expected quota of silicon wafers from GlobalFoundries would incur a penalty, but AMD didn't pay one in 2014.

So why was AMD so dependent on GloFlo when it could have just taken the chip design to TSMC? AMD did this with its Krishna and Wichita APUs. Some that might have been because it would have pushed back pushed introduction dates back at least a year. Skybridge would have lead to multiple designs on 20nm node which was always supposed to be short lived. The new chips would have ended up competing with Zen, which would have been a nightmare.

For those who came in late, Zen is AMD's first major core design after a stint with multi-core modules based around "Bulldozer" architecture. Bu it is starting to look like Zen cores will share no hardware resources with each other, than a last-level cache (L3 cache).

According to Techpowerup Zen scale up will stop at four cores sharing 8 MB of L3 cache and a set of four cores makes up what AMD calls a "quad-core unit." This is not a module, the cores share no hardware components with each other, besides the L3 cache.

If AMD wants to build chips with more than four cores, the company will have to scale up the number of such "quad-core units." A normal APU will have one unit, with four cores, but a high-end desktop chip will likely feature two units, making up eight cores, and 16 MB of total L3 cache, eight MB shared between four cores, each. Opteron chips could have 16 cores, and 32 MB of L3 cache.

So why this design? In theory it means that you can carve out dual-core parts. Clumping four cores is a harvesting technique much like Intel's Haswell.

What will be important is that if AMD getting the energy-efficiency right on Zen and for that it will be hoping that GlobalFoundries to get its 14 nanometer FinFET working.

Globalfoundries is now getting volume production from the 14nm FinFET technology it licensed from Samsung.

According to Expreview the 14nm process consists of LPE (low-power early) and the LPP (Low Power Plus, advanced low power processing) and both are being churned out at the New York, Malta, Fab 8 wafer fab production.

According to the official disclosure of the progress GloFlo's 14nm LPE process has passed certification earlier this year. Now it appears that yields have reached the level of mass production.

The 14nm LPP process is also underway and expected to be certified in the Q3 quarter and get Quarterly volume production in the first quarter of next year.

The 14nm LPP system is being pushed towards mobile processors and high-performance core product. This includes AMD next-generation CPU and GPU technology which will use 14nm FinFET technology. Since Gloflo is its old chum it is almost certain that AMD will get them first.

Nvidia

Nvidia might use GloFlo tech in its next generation Tegra processor and GPU .This is just a rumour and besides TSMC is its normal partner, but secretly Nvidia might have hooked up with Samsung.

If this is the case then since GloFlo and Samsung are also allies, it is possible that it could get the work.

Nvidia boss Jen-Hsun Huang, admitted that it was possible but refused to confirm or deny if it was happening.

GlobalFoundries clarified details of the ramp up of 14nm chip production at fab 8 manufacturing facility in New York.

It has apparently has taped out multiple 14nm designs and is tweaking its equipment using a lead product at the moment. The company is on track to start high-volume shipments of 14nm chips this year.

Jason Gorss, a spokesman for GlobalFoundries said that the outfit's 14nm FinFET technology is maturing and on schedule at our Fab 8 facility in Malta, New York,.

"The early version (14LPE) is qualified in our fab and our lead product is yielding in double digits. Since 2014, we have taped multiple products and testchips and are seeing rapid progress, in yield and maturity, for volume shipments in 2015."

The comment follows a statement from Mubadala Development last week week which claimed htat GlobalFoundries had begun ramping manufacturing of 14nm chips for customers.

Mubadala, which owns GlobalFoundries, did not provide any details. Even though production is currently not in high volume, it is clear that GlobalFoundries ships certain chips to clients.

It is not clear what 14nm chips GlobalFounfries produces at present, but it is highly likely that the company makes Samsung Exynos 7420 application processors for its process tech partner.

Another early partner of GlobalFoundries with its 14nm FinFET production could be Apple, which is expected to use Samsung's 14nm process tech to make its upcoming A9 system-on-chip.

Samsung involved

This process uses FinFET transistors and rely on back-end-of-line (BEOL) interconnects of 20nm manufacturing technology. The14nm FinFET transistors allow a performance boost for chips by 20 per cent at the same power or cut power consumption by 35 per cent without decreasing performance or complexity.

GlobalFoundries has started its ramp up in production of 14nm technology and it is mostly thanks to its partnership with Samsung.

Samsung has managed to do quite well at getting its own 14nm technology ready and has been using its Galaxy S6 and Galaxy S6 edge smartphones to demonstrate its fabrication technology. But it seems that going on behind the scenes was a partnership with GlobalFoundries to share the tech.

Now GloFlo is ready with its version of 14nm technology.

According to Patexia Mubadala Development which is the Abu Dhabi-based investment and development company that owns GlobalFoundries has released a statement about its own 14nm production.

Mubadala said:

"GlobalFoundries announced a strategic collaboration with Samsung to deliver capacity at 14nm, one of the industry's most advanced nodes, as Fab 8 in Malta, New York began ramping production for customers".

Samsung developed both the 14LPE (low-power early) and 14LPP (low-power plus) technologies, licensing them to GlobalFoundries.

Bit of a surprise

Both of the manufacturing processes use FinFET transistors, but they still fall back on back-end-of-line (BEOL) interconnects which are fabricated on the 20nm node.

While both technologies don't cut chip's costs in comparison to the previous node, but they do provide a nice 20 per cent boost in performance at the same power usage, and cut power consumption by up to 35 per cent without harming performance.

Still the news is a bit of a surprise and delivered on a poor news day when everyone other than Fudzilla is on holiday, eating chocolate, or in church remembering what happened when a God wen up against the established church.

Last week it emerged that TSMC may be losing some 28nm orders to other foundries, and now it appears that UMC is snatching its business.

The rumours suggested MediaTek and Qualcomm are looking for cheaper 28nm alternatives, namely from UMC, SMIC and GlobalFoundries.

Now it seems UMC is opening up the champers, but it's not alone.

Cheap chips for China

According to DigiTimes, UMC’s 28nm node has reached mature yield rates, and has attracted orders from Qualcomm and MediaTek. Since these are practically the two biggest smartphone SoC makers today, this is obviously great news for UMC – not so great for TSMC though.

Qualcomm and MediaTek are apparently trying to get the best bang for their foundry buck, as they are racing to the bottom in the Chinese smartphone market. The vast market is dominated by 28nm parts, mostly quad- and octa-core Cortex-A7 and Cortex-A53 parts.

Since smartphone ASPs in China are relatively low, every penny counts and cheaper chips get more design wins.

SMIC and HLMC are being tapped too

UMC is not the only foundry benefiting from Qualcomm’s and MediaTek’s newfound love of cheap silicon.

GlobalFoundries, HLMC and SMIC have also secured orders for 28nm basedband parts and low- to mid-range 28nm application processors.

Some smaller players are also moving away from TSMC. Nvidia is said to be taking its business to Samsung, at least as far as Tegra parts go. However, this is not something we can confirm at this point.

According to South Korean media reports, Samsung is interested in acquiring AMD, all in an effort to compete with rival chipmakers Intel and Qualcomm.

AMD has seen better days, and although the company’s semi-custom processors and GPUs are doing well, the CPU business has been stagnant for years.

This is one of the reasons why numerous rumours of potential takeovers and mergers involving AMD surfaced in recent years. The latest one comes from a Seoul-based business publication.

What Samsung stands to gain from such a deal

The short answer would be IP. AMD has decades worth of patents and R&D that could prove very useful for Samsung.

The release of the Exynos 7420 was a watershed moment for the company, as it managed to beat all of its rivals to 14nm. Coincidentally, Samsung’s 14nm node is not just Samsung’s – it’s the result of a collaboration with AMD spin-off GlobalFoundries.

However, while the Exynos 7420 uses a cutting edge node, the underlying design is more or less pedestrian. The chip uses off-the-shelf ARM CPU and GPU cores, in the form of Cortex-A53, Cortex-A57 and Mali-T760 MP8 CPU and GPU designs.

Qualcomm and Apple design custom ARM-based CPU cores, while Nvidia has custom CPU and GPU cores for its tablet SoCs.

In acquiring AMD, Samsung would gain access to a number of vital technologies, namely AMD’s graphics know-how and IP. AMD also designs ARM-based server parts and rumours of AMD ARM consumer chips refuse to die. Of course, Samsung would also get access to AMD's x86 license via proxy.

What about AMD’s dowry?

On the other hand, AMD would get something much more important – money. AMD needs it, Samsung has it.

AMD could enter the mobile SoC market through the back door, and could potentially go on to license mobile graphics to vendors other than Samsung. Nvidia appears to have similar plans for its own graphics architectures – rather than using them exclusively in its low-volume Tegra SoCs, Nvidia could try to license Maxwell and subsequent architectures to other SoC makers.

A potential Samsung-AMD deal could also prove very beneficial for GlobalFoundries, as the company could step up its cooperation with Samsung, while at the same time building AMD’s x86 parts, and eventually AMD GPUs. Needless to say, this would not be good news for TSMC.

Speaking of AMD x86 parts, it’s hard to say whether Samsung would have much use for them. While the company still makes some x86 products, Samsung has dialled down its efforts on the notebook and AIO front. However, the potential is still there, especially in semi-custom APUs and low-voltage APUs that could end up in tablets and similar products.

Are the rumours true?

We don’t know. We’ve heard similar rumours before and needless to say, they did not pan out. A deal between the two tech giants could prove beneficial for both of them, think of it as a win-win situation, but that does not necessarily mean it is going to happen.

At this point, we have more questions than answers, and let’s not even get into the financial side of the story. Over the last ten years, AMD’s stock has been on a rollercoaster ride, but the long-term trend is grim. Ten years ago AMD was trading at $15+, peaking at $40 in early 2006, but it’s been downhill ever since. AMD closed at $2.63 yesterday, with a market cap of $2.17 billion.

That does not sound like a lot of money for Samsung. When AMD announced the acquisition of ATI back in 2006, it paid a staggering $5.4 billion in a cash and stock deal. At the time, AMD’s market cap was $20+ billion.

While it would make sense on more fronts than one, rumours of a Samsung takeover have been floating around for years and at this point they are not easy to believe. There's a lot of speculation and not enough facts.

Reuters carried a rather interesting announcement about TSMC, the maker of most SoCs and GPUs we care about.

Taiwan Semiconductor Manufacturing Company (TSMC) is planning to invest $500 billion Taiwanese dollars in an advanced chip factory. This translates to a saucy $16 billion USD, but the company declined to comment on the timeframe for the investment.

Traditionally, semiconductor manufacturers like GlobalFoundries, TSMC, and Intel invest billions of dollars in the new technologies, new nodes, and despite the investments some transitions go wrong. The most recent example is the transition from 28nm to 20nm manufacturing, which was was delayed by almost two years.

TSMC and Samsung have started manufacturing low-power A8 processors for Apple, while Samsung has some of its Exynos chips in 20nm. Qualcomm is getting its first Snapdragon 810 20nm chips as we speak and we expect vendors to start shipping devices based on the new chip in March.

We have learned that high performance discrete GPUs will never make it to 20nm, simply as process has too much power leaks and poor yields with big cores. The GPU industry will move to 16nm FinFET at TSMC in 2016, or 14nm with Samsung and GlobalFoundries at about the same time. After 16nm FinFET, TSMC is planning to transition to 10nm as early as late 2016, but we believe that this is very optimistic timing.

A $16 billion investment may sound like a lot of money, but Intel has invested more than $6 billion in Israel based fabs since 2006. Intel is right now preparing Israel fabs for 10nm, while Ireland is manufacturing most of Intel's 14nm SoCs right now. The next node after 10nm for Intel is 7nm, probably happening before the end of this decade.

Back in 2009 in Albany, New York state, GlobalFoundries executives and chaps from The College of Nanoscale Science and Engineering were telling us that each transition cost to a new node grows exponentially. Despite large R&D investments, it is getting harder to transition from 28nm to 20nm to 14nm. This is one of the reasons why Samsung and GlobalFoundries have joined forces for their 14nm push.

Since the transition to TSMC’s 20nm node does not appear to be in the cards for AMD or Nvidia, both outfits are in the process of refreshing their GPU line-ups with new 28nm parts. Nvidia is off to a good start with Maxwell and now it’s AMD’s turn.

According to Italian tech site Bits and Chips, AMD simply needs something to fill the gap between TSMC’s planar 20nm process and upcoming FinFET processes. The 28SHP node, used for AMD’s Kaveri APU, appears to be the alternative.

The node should offer higher frequencies at lower voltages compared to TSMC’s 28nm node, even a somewhat smaller die area due to higher density. In theory, this would allow AMD to produce a more efficient GPU design, which is good news as Nvidia currently has a big lead in performance-per-watt with its Maxwell 2.0 products. A more efficient node could allow AMD to close the gap.

However, this does not mean that TSMC is off the table as a long-term partner for AMD. The company may be forced to use TSMC’s 16nm FinFET (16FF) process for future products, as the node is likely to become available ahead of Samsung’s and GloFo’s 14nm FinFET node. In addition, the 14nm FinFET node appears to be almost completely booked for mobile SoCs.